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LCQ4: ATV's licence renewal application

     Following is a question by the Hon Sin Chung-kai and a reply by the Acting Secretary for Commerce and Economic Development, Mr Godfrey Leung, in the Legislative Council today (January 28):


     It has been reported that Asia Television Limited (ATV) has been plagued with financial problems recently. Apart from repeatedly defaulting on payments of employees' wages since September last year, ATV has even defaulted on its carrier licence fee and the fee for domestic free television programme service licence (TV licence) for 2014-2015 payable to the Communications Authority (CA). In addition, ATV's TV licence will expire on November 30 this year and the Chief Executive (CE) in Council is considering its licence renewal application. In this connection, will the Government inform this Council:

(1) whether the authorities have grasped the latest situation in respect of ATV's default on payments of employees' wages and the aforesaid licence fees, and whether they have regularly reported the latest situation to CE in Council; if they have not, of the reasons for that;

(2) given that ATV reportedly defaulted on payments of the aforesaid licence fees for 2012-2013, whether the authorities know if CA will assess afresh whether ATV's financial position complies with the requirements of the TV licence; and the circumstances under which CA will suspend ATV's TV licence under section 31 of the Broadcasting Ordinance (BO); and

(3) given that BO stipulates that where CE in Council decides not to extend or renew a TV licence, he shall notify the licensee at least 12 months before the expiry of the validity of the licence, and that ATV's TV licence will expire on November 30 this year, whether the authorities have assessed if the fact that CE in Council has not yet made a decision on the renewal of ATV's licence is tantamount to extending the validity period of the licence, and whether the purpose of not making a decision is to allow ATV more time to look for new investors so as to facilitate the subsequent approval for the renewal of the licence; if this is not the case, when the authorities expect to announce the outcome of the licence renewal application?



     My reply to the three-part question is as follows:

(1) The Government is very concerned about Asia Television Limited (ATV)'s recent defaults in wage payments. We have repeatedly made open appeals urging ATV's shareholders and management to promptly and positively resolve the overdue wages owed to their staff in full accordance with the law. The Government has also offered appropriate assistance to the affected staff.

     As regards the suspected offences committed by ATV under the Employment Ordinance (Cap. 57) (EO) for its default on payment of employees' wages for July to September 2014, the Labour Department (LD) has earlier laid a total of 34 summonses against ATV and the director concerned respectively, namely ATV for wilfully and without reasonable excuse failing to pay employees wages due under section 23 of EO; and the director concerned for committing wage offences with his consent, connivance or neglect under section 64B of EO. Fresh hearing of the case is scheduled to take place on January 30, 2015 at Sha Tin Magistrates' Courts. In respect of ATV's late payment of wages for November 2014, LD also laid 42 summonses on January 27, including 21 summonses against ATV for offences under section 23 of EO and another 21 against the director concerned under section 64B of EO. Apart from the above, ATV's failure to effect wage payment for December 2014 to employees within the statutory time limit is currently under LD's investigation. LD will strictly enforce the law and initiate further prosecution action if there is sufficient evidence.

     As far as broadcasting regulation of domestic free television programme (free TV) service is concerned, the Communications Authority (CA) has written to ATV several times to remind ATV of its obligation to abide by the Broadcasting Ordinance (Cap. 562) (BO) and the licence conditions, including but not limited to the requirement of maintaining adequate financial resources and manpower to ensure continued provision of free TV service meeting all statutory requirements and licence conditions, such as the broadcast of a specified number of hours of "positive programmes" as required under the licence.

     To date, ATV has not yet paid the fixed fee for its "free TV service licence" and the annual fee for its "fixed carrier licence" for the licence year 2014/2015 in accordance with the statutory and licence provisions. The CA considers it a serious breach for ATV to have failed to settle the annual licence fees on time, being the second breach of the same requirement in three years. As such, it has provisionally decided to impose a financial penalty of a total of $200,000 on ATV. The CA has just received ATV's representations on the matter. The CA will consider ATV's representations before making its final decision in accordance with established procedures.

     Moreover, the CA has decided to reject ATV's application for settling the licence fees in arrears in five instalments, and provisionally decided to direct ATV to settle the outstanding licence fees and interests in two instalments by February 18 and March 18, 2015 respectively. The CA will consider ATV's representations before making its final decision in accordance with established procedures. If ATV cannot comply with the said direction to pay the outstanding licence fees and interests according to the specified timeframe, the CA will consider imposing a more serious sanction, including invoking the licence revocation procedures in accordance with the BO.  

     ATV's free TV service licence is due to expire on November 30, 2015. ATV submitted an application for renewal of its free TV service licence (renewal application) in November 2013. In processing the renewal application, the Chief Executive (CE) in Council will consider all relevant factors, including the licensee's operational capability, financial condition, etc., before making a decision.

(2) Section 31 of the BO provides that the CA may suspend a licence for a period of not more than 30 days in some specific circumstances, including the licensee's failure to pay the fee(s) payable under the BO (including licence fees), and the licensee's repeated and material contraventions of the legislation, licence conditions as well as the Code of Practice, direction, order or determination issued by the CA. As regards the free TV service licence, the CA shall, before making a decision whether or not to suspend a licence, serve on the licensee a notice in writing stating that the CA has under consideration the suspension of the licence and giving the grounds and any other reason concerned. The CA also has to consider any representation made to it in relation to the proposed suspension; and a public hearing has to be conducted in accordance with procedures for the hearing determined by the CA if the proposed suspension of the licence is due to material contraventions. Where the CA finally decides to suspend the licence, the suspension shall not come into force if an appeal under section 34 of the BO against the suspension is made to the CE in Council by the licensee, until the appeal is withdrawn, abandoned or determined.

     I believe that the CA will handle any offences of ATV in accordance with the aforesaid legislation if it is deemed necessary to consider licence suspension upon the CA's examination of the nature and seriousness of the offences.

(3) Under the BO, the CA shall as soon as is practicable after the receipt of a renewal application and, in any case, not later than 12 months before the expiry of the period of validity of the licence, submit recommendations to the CE in Council in relation to the extension or non-extension or renewal or non-renewal of the licence, and where appropriate, the conditions subject to which the licence may be extended or renewed. In this connection, the CA submitted its recommendations to the CE in Council on November 4, 2014.

     Under section 11 of the BO, the CE in Council may, during the period of validity of a free TV licence, extend or renew the licence, which shall take effect upon expiry of the validity of the licence. Under section 8(1)(a) of Schedule 4 to the BO, where the CE in Council decides not to extend or renew a licence, he shall cause notice of the decision to be served on the licensee at least 12 months before the expiry of the validity of the licence (12-month notice). Under section 8(2) of Schedule 4 to the BO, where it is necessary for the purpose of complying with the requirement as to the "12-month notice", the CE in Council may extend the term of a licence. In other words, the "12-month notice" is the length of notice as required by law that the CE in Council shall give to a licensee after it decides not to renew a licence. This requirement therefore shall not be regarded as "a tantamount to extending the validity period of the licence" when the CE in Council has yet to make any decision.

     I wish to point out that the CE in Council has strictly adhered to procedural and legal requirements in processing the renewal application since the CA's submission of its recommendations. The outcome will be announced after the CE in Council has made a decision.

Ends/Wednesday, January 28, 2015
Issued at HKT 13:53


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